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Step 1 – Getting Started


The process of buying a home is stressful, at times. Both the financial and emotional investment of home ownership is considerable. The antidote for any homebuyer is a clear understanding of the process. How it works. What happens when. What to expect next. Here you will find all the information you will require from the initial research stage to closing.

First off, decide what kind of new home you want to buy…

Decisions, Decisions.  Apartments in some areas have proven to be as profitable as detached villas in some other areas.  While detached villas have been a preferred investment by home owners, changing demographics have increased the demand in apartments and townhouses especially if rental investment is one of the deciding factors.  In order to decide the type of property to buy, other factors will need to be considered and the reason behind purchasing a property should be the deciding factor.

Decide on a location…

In order to make the right purchasing decision you must first decide what are your priorities; If rental investment is your priority, then you can eliminate your choices according to the areas that receive the maximum rental return.  If your priority is to buy a home to be used as a holiday home at first and then to become your permanent residence in the near future, you might want to consider investing in the city and upgrade into a more rural area upon retirement.  Finally, if the purchase purely involves a permanent residence then you might consider investing in more rural areas.

 Now think about the details…

Tax Benefits

Cyprus has an excellent tax regime for residents and retirees, which makes it an attractive option for those wishing to invest in buy to let properties or retirement.

Amongst the benefits for a UK buyer of investing in Cyprus property are: No Inheritance TaxOverseas dividends and interest exemptProfit from the sale of equities is exempt from Capital Gains TaxProfit from the sale of UK properties, including investment properties, exempt.

Cyprus, although not an off-shore tax haven, does offer very substantial tax benefits to people who are official residents.  These benefits apply to both Companies ( with a corporation tax as low as 10% )and also to those individuals who are retired or receiving a pension.  For instance, foreign pensions received in Cyprus by a Cyprus tax resident (e.g a Brit who spends more than half the year in Cyprus) are taxed at only 5%. In addition, Inheritance Tax has been abolished –again, another reason why people would want to retire to Cyprus, especially as English is so widely spoken and as the legal system is based on English Common Law.

Another interesting point is that British retirees can get their pensions paid directly into a Cypriot bank. Again, these things are making Cyprus more attractive to its target market – the aging population of Northern Europe.

Healthcare

Healthcare Doctors, Dentists, General Practitioners and Specialists are available throughout the Island and their fees are low compared with other European Countries. Pharmacists are also well informed, which may save a trip to the doctor and most pharmaceutical products can be bought over the counter.

Generally, healthcare in Cyprus is inexpensive and is much cheaper than most other European Countries, since every town has its own Government hospital, fees are very low. However, for those who prefer private treatment there are a number of private clinics with competent Specialist Physicians in all fields.  A doctor’s visit costs about €25 and X-rays from €30. It is worth noting that statistics show that 1 in every 600 Cypriots is a qualified member of the medical profession, so you know there will always be someone nearby who can help.

Pets Travel

Bringing your pets with you to Cyprus is a straightforward procedure. Once you have obtained a ‘European pet passport’ from your home country, the only simple formality that remains is obtaining a license from the Department of Veterinary Services in Pafos. This will be granted if your pet has the necessary vaccinations.

Your pet will need to have been vaccinated against the rabies virus, at the age of not less than 3 months, with an inactivated rabies strain according to OIE standards, at least 1 month and within 1 year prior to departure for arriving in Cyprus.  A blood test needs to be taken 30 days after the vaccination to ensure that the correct amount of antibodies is present to ensure immunity in case of infection.

Your pet must have undergone an anti-parasitical treatment 24-48 hours prior to departure to the Republic of Cyprus.  You will be required to produce documents verifying that the animal has arrived in the Republic of Cyprus from an EU member country, along with your pets vaccination cards.

Owners are requested to inform the district veterinary officer in Cyprus (48 hours prior to arrival) of the date and hour of arrival, along with the flight number to avoid delays in releasing animals.  The animal must be accompanied by its owner or by a person who is responsible for it at the time of the importation. The animal must have identification and be micro chipped.  All owner details must be provided as well.

The District Veterinary Office of the intended place of residence in Cyprus can be contacted to help with any queries you may have.

Visa & Residency Issues

Any EU citizen can stay for up to 90 days in Cyprus without a visa. Those wishing to spend longer will need a residence permit, which can be obtained from the local Cypriot authorities. This is a fairly straightforward process for anyone coming from an EU member state. That said, anyone wanting to stay permanently will need something called an Alien Registration Certificate. Proof of residence, funds and identity are required for this.

Purchasing Costs

Solicitor Fees
Solicitor Fees are usually around Euros 1,700+

Property Transfer Tax
This is necessary in order to transfer FREEHOLD ownership to your name, and is due when the property is registered in your name at the Land Registry Office. This process is completed after the Council of Ministers approval.

The Property Transfer tax is a once-only tax payable to the Land Registry Office according to the scale below:

Value of Property Transfer Fee Rate %

 Up to 50,000CYP/85,430Euros

 3.0

 From 50,000-100,000CYP/85,430-170,860Euros

 5.0

 Over 100,000CYP/170,860Euros

 8.0

Stamp Duty
The purchaser is liable for the payment of stamp duty at the rate of 1.5 Pounds per thousand up to the value of CYP100,000 and thereafter the rate is 2.00 Pounds per thousand. This duty should be paid within 30 days of signing the Contract.

Mortgage Fees
There is a registration fee of 1% of the amount secured plus any relevant stamps.
Immovable Property Tax

The registered owner of the property is liable for this annual tax and it is based upon the value of their property.

 

ValueCYP/Euros Annual Tax Per Thousand

 Up to 100,000/170,860

 Exempt

100,001 to 250,000/170,861 to 427,150

 2.0

250,001 to 500,000/427,152 to 854,300

 3.0

over 500,001/854,302

 3.5

Capital Gains Tax
Capital Gains Tax is levied at 20% on gains arising from the disposal of property. However, for foreign-owned property that is sold, generous allowances and exemptions from Capital Gains Tax exist. As the gain also takes into account inflation, the actual appreciation coupled with the allowances and exemptions leaves little for taxation.

Inheritance Tax
If the deceased was domiciled in Cyprus, there is no Estate Duty payable. If the deceased was a tax resident in Cyprus, there is no Estate Duty on the Cypriot property or any other property owned by the deceased in any other country.

Non – Residents Mortgage Information

LOAN PURPOSE
You may use the loan to build a house, apartment, to purchase a plot of land or for extensions/renovations to your house.


LOAN AMOUNT

There is no maximum loan amount.

CONTRIBUTION
You would be required to contribute minimum 20% of the market value of the property.

CURRENCY
We can provide very competitive housing loans in Euros and in all major currencies.

REPAYMENT
A housing loan may be repaid over a period of up to 40 years.

GRACE PERIOD
If you are purchasing a property that is under construction, you have the option to postpone the repayment of the loan until construction is completed.  During this time, you will be required to pay the accrued interest.

INTEREST RATE
The pricing of your loan will depend on the level of your contribution and currency of the loan.


For Non-residents

If the loan is in Foreign Currency the interest rate is

(a) contribution 30%+ over Libor + 2.00%

For Residents
If the loan is in Foreign Currency the interest rate is

(a) contribution 21%+ over Libor + 2.00%

LIFE INSURANCE
In order to release you and/or your family of the burden of repayment in case of an unforeseen event (loss of life, disability, etc.) you are required to take out and assign in favour of the Bank, a life insurance policy equal to the value of the loan.

PROPERTY INSURANCE
To cover any contingency relating to your property (fire, flood, burglary etc.,) must be insured as soon as the property is handed over.

OTHER CHARGES
Arrangement fees (1.00% of the loan amount) and Documentation fees (depending on the documentation required for the loan) are charged once off.

Mortgage Fees are 1% of the loan amount, payable to the Land Registry office.

BANK SECURITY
(A) Company Guarantees
(B) Assignment of purchase of Contract
(C) Assignment of Life Insurance
(D) Power of Attorney

Mortgage Checklist
Additionally in order to enable the property credit assessment of each application, the following must be provided by each applicant:

Photocopy of the applicant’s passport.
Bank reference letter from existing bank.
Proof of Income by providing copies of the last 6 months’ bank statements/ salary advices/ copies of then last 2 years’ tax accounts.
Copies of receipts of down payments made by the purchaser.
Declaration of Assets statement duly signed by the applicant.
Copy of the signed sales contract.